| 1) Which one of the following best describes termination liability on a contract? | | Amount that the contractor owes the government when the contract is terminated for default | | Amount that the government owes a contractor when the contract is terminated for convenience | | Maximum amount to be paid by the government to the contractor when a multiyear contract is cancelled | | Minimum amount to be paid by the government to the contractor when a multiyear contract is cancelled | |
| 2) Which of the following characteristics is FALSE about a Fixed Price Incentive contract? | | Share ratio specifying government/contractor shares of cost overruns and underruns | | Negotiated price that may be changed based on economic conditions identified in the contract | | Ceiling price representing the maximum to be paid by the government | | Target price consisting of target cost and target profit | |
| 3) Which one of the following best describes DoD philosophy of budgeting for a Fixed Price Incentive, Firm Target contract? | | Budget for the target price | | Budget for the estimated negotiated price | | Budget for the estimated negotiated price and the maximum amount of the price adjustment clause | | Budget for the ceiling price | |
| 4) Which one of the following statements regarding Earned Value Management (EVM) is FALSE? | | Work progress should be measured in subjective terms | | The scope of the work should be related to its associated budgets and schedule | | The value of the work completed should be expressed in dollars, or other measurable units | | Program Managers should use EVM as a risk management tool | |
| 5) Which one of the following best describes DoD philosophy of budgeting for a Cost Plus Incentive Fee contract? | | Budget for the estimated cost plus the base fee plus the entire earnable award fee | | Budget for the target cost plus the target fee | | Budget for the ceiling estimated cost plus the base fee only | | Budget for the estimated cost plus the fixed fee to be paid regardless of contractor performance | |
| 6) Which one of the following is a characteristic of a Cost Plus Fixed Fee contract? | | Set fee that will be paid regardless of contractor performance | | Award fee that may be earned based on contractor`s performance relative to criteria established in the contract | | Target price consisting of target cost, plus target fee, and incentive fee | | Share ratio specifying government/contractor shares of cost overruns and underruns | |
| 7) Your program office has just completed analysis of the latest Contract Performance Report on its Cost Plus Award Fee contract with Cardinal Industries. The following information is available: "Best Case"EAC= $321 million "Most Likely"EAC= $340 million "Worst Case"EAC= $353 million Total Contract Fee (Base Fee + Award Fee) = $32 million Which one of the following represents the best estimate of the funding requirements (the amount the government should budget) for the Cardinal Industries contract? | | $353 million | | $385 million | | $340 million | $372 million | |
